Ed Hinerman On Life Insurance

Two Life Insurance Potholes In The Road. Blood Pressure And Cholesterol!

There are plenty of people that apply for life insurance and are sure they are going to get the best rate class available. In their mind they are even ahead of Superman because he has that disorder that has to do with Kryptonite. These people have never been sick, only see a doctor when their spouse makes them get a checkup, and have parents that are well on their way to living to age 115.

You know how sometimes you are just driving down the road and out of nowhere you hit a pothole? Before long even people in California will know what I’m talking about when the budget cuts get to the highway department. It shakes your world, your teeth and occasionally ruins your tire. It’s a bad experience.

A pothole in the life insurance application process would be something showing up on your exam or in your labs that bumps you a rate class, or two, or three….something you had no idea about and never saw coming. These things generally come out of nowhere (referring back to the first paragraph) because you believe that you are immortal and have never truly been checked out by a doctor.

One that bites a lot of applicants is cholesterol. Quick now! What was your last cholesterol reading? Your HDL? LDL? Mine were 164, 45 and 104. It’s a trick question in that the only way you would know the answer is if you had been to a doctor or a health fair and had lab work done. If you did that and had a problem then there’s a good chance you wouldn’t be finding out about your out of normal range lipids on a life insurance exam when it isn’t just a matter to discuss with your spouse or doctor, but a determining factor in what rate class an underwriter will approve you at.

So, how to avoid that cholesterol surprise on your exam? There are health fairs everywhere and the good news is that they are cheap and easy. I know this is a stretch for guys, but suck it up once a year and go donate a little blood and get checked out. Better to find out your cholesterol is creeping up on you that way than having the ER doc explain the relationship between cholesterol and blocked arteries.

If your cholesterol is stepping out of the normal range, diet and exercise might just be the cure. Even if you have to medically control your cholesterol most insurance companies still allow their best rate class. So, annually guys! And annually isn’t once every decade. That would be decadually. Once a year. Your wife will love you for it. Your kids will see a good example when you do it. You’ll get better life insurance rates. You’ll feel better and your friends will be impressed.

The other pothole is blood pressure. I had high blood pressure once, actually just one time due to some medication I was on. When my blood pressure when from my normal 110/65 to 145/95, I felt it and it didn’t feel good. In fact it felt so wrong that I have been convinced since then that high blood pressure is bad for you.

Quick! What was you last blood pressure reading? If you don’t know this one you really need to get out more. There are blood pressure machines in every Walmart and in most pharmacies and grocery stores. And they are free!!! If you find out your blood pressure is running higher than it should (they have little charts right on the machines), again, diet and exercise might do the trick. If not, again, there are more and more companies that want to see you doing the right thing and will approve you at their best rate class even if you are medically treated for hypertension. That’s a much better bet for them than taking their chances with heart attacks or a stroke.

Bottom line. There are plenty of folks out there that can just la la their way into the best rate class, but if you aren’t sure how that exam and labs will turn out it’s time for a preventive checkup. Your Mom would be proud of you.

Add comment May 14th, 2009

Holding My Breath! 7 Months Until Estate Tax Disappears!

Ok, I’m not really holding my breath, but you do realize that with 7 months left to go Congress needs to act or there will be a free estate tax ride in 2010. As the law now stands, the exemption has been rising steadily over the last 9 years from the malnourished $600,000 in 2000 to what many consider a pretty appropriate $3,500,000 in 2009.

So what’s the future of estate taxation and estate tax exemptions? If Congress snoozes there could be a lot of rich folks who seriously consider planned obsolescence next year. No action actually does away with the estate tax completely, as in well, completely in 2010. It’s only for that one year, but if it all came together for a family, that lack of a tax could leave millions or billions in their pockets rather than sharing the wealth with the government.

And for all of those families who have so prudently planned over the years by putting second to die insurance in place to pay taxes, ca-ching, bonus time. Instead of going to pay taxes, all of that life insurance money will be added to their non taxable estate. Kind of lends a new take on that old native American movie line, “it’s a good day to die”.

Then comes 2011 when the estate tax comes back with a vengeance. The tax rate goes from the 2009 45% up to 55% and the exemption goes down from the 2009 $3.5mm to $1mm. So what would that mean if for instance we were talking about a $5mm taxable estate. In 2009 that would leave $1.5mm taxable after the exemption and that would be taxed at 45%, so the government would get $675,000. In 2010 all $5mm stays in the family. In 2011 $4mm would be taxable after the exemption and at 55% the government would get $2.2mm. Hmmmm!

Personally I think the first nine years of the estate tax revision made sense. The exemption was long overdue for a serious increase and the tax rate really was too high. What I can’t figure is what bozo thought it was a good idea to make it temporary and actually have it disappear for a year and reappear at the levels that were grossly unfair to start with? So, what’s rally going to happen?

Of course it’s all speculation until the trigger is pulled, but a compilation of all the wild guesses floating around has Congress amending the current law to continue the exemption and tax rates at the 2009 level on into the future. That seems to be the middle of the road right now.

For planning purposes the best answer is still the tried and true 2nd to die universal life no lapse products. Cost effective. Great guarantee. Some still offer an increased death benefit during the first four years to offset lack of planning if you don’t have a life insurance trust.

Bottom line. We’ll know for sure what the future holds for estate taxes when it happens, but one thing is certain, today’s exemption and rate are far more fair than where we started and there is little to be gained by letting the current law run its’ course.

Add comment May 14th, 2009